Earlier this year when the Samsung Galaxy S7 series was revealed, the South Korean company introduced a new “Upgrade Program” for customers who may want to remain up to date with the latest flagship releases in the future. These customers will be invited to upgrade to the latest flagship one year after signing up for the Upgrade Program, and should they choose to upgrade, they will have to send their current flagship phone to Samsung and receive a newer model. All well and good, but Samsung never explained what will happen to those returned used flagships which should still have enough life in them to remain relevant in the market for a good amount of time. The answer may have been provided by Reuters in a recent article citing an anonymous “person with direct knowledge of the matter”, who claims that Samsung will start a refurbished smartphone program next year.
As the smartphone market continues to grow at a slower pace than before due to market saturation and a relatively large number of emerging smartphone makers from Asia, Samsung apparently aims to maximize cost efficiency and maintain operating margins above 10%. Figures aside, Samsung wants to retain its top spot in the smartphone business, and in order to compete with smartphone makers from China who have the ability to release high-end smartphones at more affordable prices, Samsung will apparently start a refurbished smartphone program which will put older flagship models back on the map. Although the source did not reveal any details about pricing, logistics, and the exact timeframe when the program could reach consumers, the program will apparently focus only on the high-end smartphone segment, so in other words the Samsung Galaxy S7 and Galaxy S7 Edge could be the first candidates to be refurbished and re-released in 2017.
Evidently, the idea is for Samsung to release these refurbished flagship phones at low enough prices to attract customers who may be in the market for a budget-friendly, yet powerful phone. The program could allow Samsung Electronics to yield better results when competing with Chinese smartphone makers in emerging markets such as India, where the meat of the market consists of budget offerings. On the other hand, selling refurbished flagship phones at lower price points could result in Samsung cannibalizing its own mid-range segment. Then again, according to the source, the refurbished smartphone program is tied in with the existing Upgrade Program, so to a certain degree, the number of refurbished smartphones available to consumers will likely be dictated by the number of customers willing to take advantage of the Upgrade Program. Whatever the case may be, the information is not official and remains subject to change, but if it is rooted in reality then more details should emerge in the coming months.